Comprehensive Cost-Benefit Study Confirms EHR Value Across Life Insurance Underwriting Use Cases
Introduction
Munich Re Life US underwriters, in partnership with Clareto, a Munich Re company, have been working extensively with electronic health records (EHRs) for several years. Their ability to leverage EHRs for risk assessment has grown significantly with this experience. This led them to think anew about the efficacy of EHRs across multiple underwriting use cases: Does the original and widely held industry belief that EHRs’ primary and best use would be to replace the attending physician statements (APS) stand up to scrutiny? Is the focus on APS replacement even the best use case for EHR adoption?
These questions prompted the Munich Re Life US team to take a step back and look at EHRs as they would any new data source and ask where EHRs can most easily and effectively be employed in life underwriting. To answer this, they needed to quantify the incremental value of an EHR as new evidence in various underwriting environments. As a result, they conducted a rigorous and extensive EHR study — likely the industry’s largest to date. Their aim was to arrive at the real answers and not simply validate their original beliefs about the benefits of EHRs in life underwriting. While the study confirmed the effectiveness of EHRs as a core underwriting tool, it also revealed other use cases where the immediate positive impact, value, and ease of EHR implementation may outweigh APS replacement. It additionally showed specific situations, particularly those with EHRs from a less relevant physician or those with low data EHRs, where APS still delivers value on top of EHRs.
Study overview
Over the course of their work with Clareto, the Munich Re Life US team has reviewed thousands of EHRs. For this study, they focused on a subset of over 800 lives using underwriting files provided by multiple carriers representing a cross-section of markets.1 The goal of the study was to determine the impact of incorporating EHRs in multiple use cases. Underwriters were tasked with making underwriting assessments based on varying levels of underwriting evidence in the file. An EHR was then added to those files, and the underwriters documented the difference in assessment, if any.
Over the coming months, Munich Re will publish a series of white papers detailing the study’s findings. You can subscribe here to be the first to receive each paper via email.
- Non-fluid underwriting/accelerated underwriting: This is the first in a series of papers covering findings from the studies around the protective and operational value of EHRs in underwriting workflows.
- Fluid underwriting: Coming in January 2025.
- APS underwriting: Coming in March 2025.
Top-level results by use case
The results provided the Munich Re Life US team with a data set that allowed them to see the impact of EHRs on the cost of underwriting evidence, the time savings of ordering underwriting evidence, and the overall mortality savings provided by EHRs. As seen in the chart below, this enabled them to review the impact across all these factors in each use case and to form an overall conclusion as to how advantageous the use of EHRs can be.
Here are the top-level findings for each use case:
The path forward
The results showed that EHRs can now deliver on their long-awaited promise and revealed specific areas where carriers can derive the most benefit from EHRs. Given that underwriting approaches vary across the industry, Munich Re welcomes the opportunity to perform this analysis for interested carriers. Please contact us to discuss this study and to get a better understanding of the value EHRs can bring to your own use cases.
- Munich Re is committed to its legal and contractual obligations for the responsible handling of data. ↩︎